Case Study: Expat Residential Purchase with Gifted Deposits
British expat in Dubai buying a Surrey home with 20% Deposit
- British expat
- Residential mortgage
- 20% Deposit including various gifted elements
- Based in Dubai
- Employed
- £630k Mortgage
- Offered in 6 weeks
Clients situation
- British expat
- Living overseas for 15 years
- Income paid in foreign currency
- Unsure which lenders would consider the application
Main challenges
• Overseas income – paid in UAE Dirham
• Documentation requirements – source of wealth & employer’s letter confirming remuneration and basic terms of contract
• Limited lender choice due to UAE as country of residence, 20% deposit and gifted deposits originating in different countries and currencies
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
• Property purchased successfully
• Client’s family able to relocate back to the UK while he continued to live and work in Dubai
Kathryns Key Takeaway - Many lenders require minimum 25% deposit for expats and do not accept gifted deposits, especially if the gifts are coming from overseas. Rather than approaching banks individually, a broker can compare suitable mortgage options and identify lenders offering higher loan-to-value ratios such as 80% (20% deposit) as well as those who can explicitly accept overseas gift arrangements, to mitigate the risk of this becoming an issue relatively late in the process when it is picked up by a solicitor. Speaking to the right broker from the beginning can save significant time and effort.
Case Study - British expat – Edinburgh purchase, EPC G
British expat in Dubai Purchasing a UK Residential Property in Edinburgh with EPC Rating “G”
- British expat
- Residential mortgage
- 20% Deposit
- EPC Rating “G”
- Based in Dubai
- Employed
- £330k Mortgage
Clients situation
- British expat
- Living overseas for 15 years
- Income paid in foreign currency
- Unsure which lenders would consider the application
Main challenges
• Overseas income – paid in UAE Dirham
• Documentation requirements – Residency Confirmation Letter from Employer confirming client’s address in employer provided accommodation
• Limited lender choice due to Dubai as country of residence and property location in Scotland with EPC rating of “G”
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
Property purchased successfully
• Purchase with low deposit of 20% enabled client to keep some savings aside to be invested in renovations required to improve EPC rating of property
Kathryns Key Takeaway - Most lenders require properties to have EPC rating of “E” or above and not all expat lenders can lend in Scotland. In this case, we were able to identify a lender who could accept a property in Edinburgh with EPC rating of “G”. Rather than approaching one lender and hoping they can accept the different features of your application, a broker can identify the narrow pool of options and approach lenders whose criteria fit the entire situation. They can help with presenting your case by explaining any unusual aspects upfront, thereby reducing the risk of an underwriter rejecting or delaying the application simply because the circumstances look unusual without the appropriate context. In this case the lender was comfortable to accept the low EPC rating on the basis that the applicant was planning on carrying out the renovation works required to improve it.
Case Study -British expat – Edinburgh holiday let remortgage
British expat in Dubai Re-mortgaging a UK Holiday Let Property in Edinburgh to be rented on AirBNB
- British expat
- Holiday Let mortgage
- AirBNB
- Based in Dubai
- Employed
- £450k Mortgage
Clients situation
- British expat
- Living overseas for 15 years
- Income paid in foreign currency
- Unsure which lenders would consider the application
Main challenges
• Overseas income – paid in UAE Dirham
• Documentation requirements – forecasted low, medium & high season rental income
• Limited lender choice due to Dubai as country of residence, property location in Scotland and short term lets on AirBNB
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
• Property purchased successfully
• Client able to capitalise on opportunity for high holiday let rental yield from property
Kathryns Key Takeaway - There are fewer mortgage options available for holiday lets in the UK than for ordinary residential or Buy-to-Let properties. This is because the holiday let income they generate is much less predictable so lenders must make assumptions about occupancy, nightly rates and seasonaility. Additionally, holiday let properties can be harder to value and sell. For example, a holiday cottage in a tourist area may depend heavily on its location, tourism demand and whether holiday use is permitted, creating more uncertainty about the lender’s security when compared with a conventional property with a long-term rental market, making it relatively straightforward to value. A lot of expat and holiday let lending isn’t heavily marketed to the public so a specialist broker may know of additional available lending options. They will be able to look across all options for criteria that matches with your circumstances and will know which lenders are likely to accept, thus greatly improving your chances of success.
Case Study - Australian-based British expat – London BTL
British expat in Australia remortgaging London BTL to fund Australian purchase
- British expat
- Buy to Let mortgage
- Capital Raising
- Based in Australia
- Employed
- £400k Mortgage
- Funded deposit for Onward Property Purchase in Australia
Clients situation
- British expat
- Living overseas for 2 years
- Income paid in foreign currency
- Unsure which lenders would consider the application
Main challenges
• Overseas income – paid in Australian Dollars
• Documentation requirements – application required facility of using surplus income to offset the stress test applied to the rental income to unlock the required loan amount
• Limited lender choice due to Australia as country of residence, no facility to offset stress test or requirement for simultaneous completion of onward property purchase
How Kathryn helped
• Reviewed circumstances
• Recommended suitable lender
• Explained documentation requirements
• Managed application from start to finish
• Liaised with lender and solicitor
Outcome
• Mortgage approved
• Client secured new expat mortgage product for Buy-to-Let property in London
• Client raised deposit required for onward property purchase in Australia
Kathryns Key Takeaway Many lenders have country exclusion lists or impose restrictive conditions when capital is being raised for onward purchases. Speaking with a broker was therefore fundamental in identifying the appropriate lending option for this client who was living in Australia and had not found a new property yet so would not have been able to complete on the onward purchase transaction simultaneously.
